Uniform Commercial Code
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The Uniform Commercial Code (UCC or the Code) is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in 49 states (all except Louisiana) within the United States of America. This objective is deemed important because of the prevalence today of commercial transactions that extend beyond one state (for example, where the goods are manufactured in state A, warehoused in state B, sold from state C and delivered in state D).
The UCC is the longest and most elaborate of the uniform acts. It has been a long-term, joint project of the National Conference of Commissioners on Uniform State Laws (NCCUSL) and the American Law Institute (ALI). Judge Herbert F. Goodrich was the Chairman of the Editorial Board of the original 1952 edition.[1] The Code, as the product of private organizations, is not itself the law, but only has the force of law in a state if enacted by by the state's legislature. When the Code is adopted by a state, it may be adopted verbatim as written by ALI/NCCUSL, or may be adopted with specific changes deemed necessary by the state legislature. Unless such changes are minor, they can affect the purpose of the Code in promoting uniformity of law among the various states.
The ALI/NCCUSL have also established a permanent editorial board for the Code. This board has issued a number of official comments and other published papers concerning the Code. Although these commentaries do not have the force of law, courts interpreting the Code will often cite them as persuasive authority in determining the effect of one or more provisions. Courts interpreting the Code generally seek to harmonize their interpretations with those of other states that have adopted it, except where specific aspects of the Code were changed by that state when adopting it, or where other aspects of state law require a different decision.
The Code, in one or another of its several revisions, has been enacted in all of the 50 states, as well as in the District of Columbia, the Commonwealth of Puerto Rico, Guam and the U.S. Virgin Islands. Louisiana has enacted most provisions of the UCC with the exception of Article 2; preferring to maintain its own civil law tradition for governing the sale of goods.
Louisiana jurisprudence refers to the sections of the UCC as “chapters” instead of articles, since the term “articles” is used to refer to provisions of the state’s Civil Code. However, different terms for UCC articles is not unique to Louisiana; neighboring Arkansas also refers to UCC articles as “chapters”, the term for equivalent subdivisions in its code of statutes. (“Article” in that state's law generally refers to a subdivision of the Arkansas Constitution.)
Contents |
[edit] UCC Articles
The Uniform Commercial Code deals with the following subjects under consecutively numbered Articles:
| ART. | TITLE | CONTENTS |
|---|---|---|
| 1 | General Provisions | Definitions, rules of interpretation |
| 2 | Sales | Sales of goods |
| 2A | Leases | Leases of goods |
| 3 | Negotiable Instruments | Banknotes and drafts (commercial paper) |
| 4 | Bank Deposits | Banks and banking, check collection process |
| 4A | Funds Transfers | Transfers of money between banks |
| 5 | Letters of Credit | Transactions involving letters of credit |
| 6 | Bulk Transfers and Bulk Sales | Auctions and liquidations of assets |
| 7 | Warehouse Receipts, Bills of Lading and Other Documents of Title | Storage and bailment of goods |
| 8 | Investment Securities | Security interests and financial assets |
| 9 | Secured Transactions | Transactions secured by security interests |
In 2003, a major revision of Article 2 modernizing many aspects (as well as changes to Article 2A and Article 7) was proposed by the NCCUSL and the ALI. Although being considered, there are no states that have yet adopted the revised version of Article 2.
In 1989, the National Conference of Commissioners on Uniform State Laws recommended that Article 6 of the UCC, dealing with bulk sales, be repealed as obsolete. It remains in force in several jurisdictions.
A major revision of Article 9 was enacted in many states with an effective date of July 1, 2001.[2]
The controversy surrounding what is now termed the Uniform Computer Information Transactions Act (UCITA) originated in the process of revising Article 2 of the UCC. The provisions of what is now UCITA were originally meant to be "Article 2B" within a revised Article 2 on Sales. As the UCC is the only uniform law that is a joint project of NCCUSL and the ALI, both associations must agree to any revision of the UCC. The proposed final draft of Article 2B met with controversy within the ALI, and as a consequence the ALI did not grant its assent. The NCCUSL responded by renaming Article 2B and promulgating it as the UCITA. As of October 12, 2004, only Maryland and Virginia have adopted UCITA.
The overriding philosophy of the Uniform Commercial Code is to allow people to make the contracts they want, but to fill in any missing provisions where the agreements they make are silent. The law also seeks to impose uniformity and streamlining of routine transactions like the processing of checks, notes, and other routine commercial paper. The law frequently distinguishes between merchants, who customarily deal in a commodity and are presumed to know well the business they are in; and consumers, who are not.
It also seeks to discourage the use of legal formalities in making business contracts, in order to allow business to move forward without the intervention of lawyers or the preparation of elaborate documents. This last is perhaps the most questionable part of its underlying philosophy; many in the legal profession have argued that legal formalities discourage litigation by requiring some kind of ritual that provides a clear dividing line that tells people when they have made a final deal they could be sued over.
[edit] Conspiracy Theories
The Uniform Commercial Code plays a significant part in the legal theories of far right groups such as Christian Patriots and Posse Comitatus. The "redemption movement" even claims that the Uniform Commercial Code is now "actually the supreme law of the land".[3]
